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Getting the Tax on Qualified Small Business Stock Correct

Qualified Small Business Stock

With the reduction of the corporate income tax rate from 35 percent to 21 percent and the ability to exclude a significant amount of gain on the sale of Qualified Small Business Stock (“QSBS”), many startups choose to organize as C corporations.  Many practitioners believe that gain recognized above the excludible amount is not eligible for regular long-term capital gains and is taxed at a 28 percent tax rate.  This is simply not the case and this misinterpretation has cost founders and other investors significant amounts in additional tax.  It is important that the tax advisor has a thorough understanding of the QSBS rules including the applicable tax rates for certain gain recognized on the sale of QSBS stock.  […]

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Clowns of the CRUT (Part 2 of 2)

Clowns of the CRUT Part 2 of 2

This is Part 2 of the newsletter on charitable remainder unitrusts (“CRUT”) which is a common planning technique for the charitably inclined high net worth family. As compared to immediate taxation on the gain on the sale of a highly appreciated asset with after tax proceeds being subject to tax annually, the CRUT can allow for superior returns where the distributions to the lifetime beneficiaries will occur over a sufficient period of time even though the remainder is distributed to charity. This is the power of tax free diversification paired with tax free growth inside the CRUT. […]

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Clowns of the CRUT (Part 1 of 2)

Clowns of the CRUT (Charitable Remainder UniTrust) 1

A charitable remainder unitrust (“CRUT”) is a common planning technique for the charitably inclined high net worth. The CRUT allows for the tax-free liquidation of a highly appreciated asset, the tax-free growth of the assets inside the CRUT, with the income building inside the CRUT being taxed to the extent of distributions to the lifetime beneficiary. As compared to immediate taxation on the gain on the sale of a highly appreciated asset with after-tax proceeds being subject to tax annually, the CRUT can allow for superior returns where the distributions to the lifetime beneficiaries will occur over a sufficient period of time even though the remainder is distributed to charity. This is the power of tax-free diversification paired with tax-free growth inside the CRUT. […]

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New Precedent of Finland Supreme Court – Criminal Penalties for Unreported Foreign Investment Income

Special Update for Finland Residents with Foreign Investment

On February 27, 2023, the Supreme Court of Finland set a new precedent (KKO:2023:15) in their ruling concerning the application of penalties for tax evasion (tax fraud), when private individuals fail to report investment income from foreign sources on their Finnish income tax returns. […]

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Tax Planning for Foreign Investors

Tax Planning for Foreign Investors

With the global economy we live in, it is important for Fund Managers to have an appropriately structured fund if they plan to have foreign investors.  Too often, the fund structure is not tax efficient for the foreign investor.  If the fund is not structured to accommodate foreign investment, why should a foreign investor consider investing in the fund? […]

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Comprehensive Planning to Provide the Most Tax-Efficient Structure

Comprehensive Planning to Provide the Most Tax-Efficient Structure

CFOs and General Counsel of multinational corporations (non-U.S. parent) with operations in the United States face complex tax implications that must be planned for on a global basis and not make decisions solely based on the U.S. tax implications. Too often, the U.S. advisor will ignore the tax implications from other relevant jurisdictions to the financial detriment of the multinational corporation. Through our associated networks and our team, we are able to plan for the tax strategy of the multinational corporation to provide a global framework by continually evaluating the multinational group’s operational and tax position and provide solutions that address key considerations. […]

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Comprehensive Global Tax Planning to Reduce the Global Effective Tax Rate

Comprehensive Global Tax Planning to Reduce the Global Effective Tax Rate

CFOs and General Counsel at U.S. multinational corporations are confronted with complex international tax that requires comprehensive global tax planning to reduce the global effective tax rate. Without a comprehensive strategy that considers not only the tax implications of the country where the transaction occurs, but also analyzing the tax implications back to the U.S., planning strategies may bring little to no actual benefit to the U.S. multinational corporation. Our team proactively plans for the tax strategy of U.S. multinational corporations to provide a global framework by continually evaluating the company’s operational and tax positions and respond with a tax analysis that addresses the key considerations. […]

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Membership Interest for Services and Purchaser’s Tax Liability

Membership Interest for Services and Purchaser’s Tax Liability

The after-tax proceeds of the sale of a business is of the utmost importance to sellers. Too often sellers agree to holdbacks or a reduction in purchase price for alleged tax issues raised by the purchaser during due diligence where the purchaser bears no actual risk. […]

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Comprehensive Approach to Tax Planning for U.S. Multinational Corporations

As multinational corporations continue to expand their operations globally, they must navigate a complex web of tax regulations and laws. It is essential that they take a comprehensive approach to tax planning and not make decisions solely based on the U.S. tax implications. […]

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The Importance of Not Overblocking for UBIT

The Importance of Not Over Blocking for UBIT

Taxes play an important role in the structure of a fund. There are various categories of investors that have different tax implications which will impact the structure of a tax efficient fund. One such group of investors are tax-exempt investors and the planning around Unrelated Business Income Tax (“UBIT”). A common planning strategy for UBIT is placing a blocker corporation in the structure. If the blocker corporation blocks more than the UBIT, the tax-exempt investors will have their investment earnings reduced unnecessarily. […]

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